Tell me something I don’t know

When it comes to complicated problems - the ones that don’t bend themselves to unequivocal answers - the first solution coming to our mind is often a poor one.

Another sign that we are on the wrong path is when a lot of other people, of similar tastes and inclinations, agree with us. We can go as far as extrapolating a rule: any widely shared view on a complicated matter is likely to be wrong. There is a simple explanation for this: none of us has time to think deeply about all possible topics. We are wired to take shortcuts and settle on a position that appears coherent with pre-defined world views. Coherent, simple, and wrong.

A bit of trickery can do magic when we fall prey to this form of “common talk”. For example, we can take up the opposite position in a debate and let our (dialectical) opponent do the work for us. If we are lucky, we might learn something we don’t know and walk away with renewed conviction.

More often, we will only hear back the same argument we set off to challenge. The advantage is that we have now made it “their” position. We have externalised it. We have gained perspective. This allows us to spot logical fallacies, incongruences and false assumptions.

It’s a painfully refreshing experience. Armed with a better understanding of our biases we can now embark in our quest for clarity.

Geeking out on society

When I was young I had my parents build me a laboratory in our garage. Every week I would go to an electronic repair store in my street and beg for some broken radio, tv or small home appliance I could take home and dismantle. So many times I asked if I could work in that store. It was my dream, but it was too dangerous. I was 9, and I was a geek.

At school I was good in math, I would get bored and got myself kicked out of classes quite often. In high school I aced physics and thought about studying astronomy once I would get to college.

I ended up studying Political Science, majoring in History of India and writing my final dissertation on the relationship between a small tribe inhabiting the north-western part of the country and the traditional rulers.

——

Willian Gibson said once that all cultural change is essentially technology driven. We shape our tools and our tools shape us. Over the last 30 odd years, generously the time I have been alive, we have built the tools of our information age. First the computer, then the web. And boy did they shape us.

During this time, being in technology has been the right choice. “On the right side of history”, as it is often said. It has been one of those epochs where finding yourself in the right place, and at the right time, could really make a difference. Even at smaller scale, you can roughly split the people you know by whether they are part of the new world or the old one.

The ability to manipulate technology is a superpower. A secret key to a white canvas begging to be painted. It hasn’t been about permission, or title, but about skills, courage and, more than we actually realise, naivety.

——

Technology has now penetrated every aspect of our life. Like water finding its way through the cracks of a stone wall, a few drops at first, soon a full stream. What we considered immutable is now all up in the air.

Talking about a tech world and a real world today make much less sense. But so is the opposite. Vekatesh Rao said it right a couple of days ago: “It doesn’t matter if you are not interested in politics. Politics is interested in you.”

Our white canvas is now society. Technology is the paint but not the painting. How we will work, how we will create and redistribute value, how we will organise ourselves. These are all open questions that beg to be answered in a new way.

Reforming society will be the new hacking.

——

I think a lot about my choices now that I work in technology. Would it have been better to follow my scientific inclination? When did I stop being a geek?

The truth is I never did. I remember when I decided to pursue a different path. Curiosity drew me to people, countries, decisions and errors more that it drew me towards machines and equations.

I wanted to find out why things looked broken in so many parts of our world. How did we get where we are? How do we go where we want to be?

Breaking an old TV apart was my way to find out how stuff worked. The attitude matters more than that topic.

Democracy rewound

Many people today believe that democracy is at risk. Trump’s victory in the US presidential election, the UK “Brexit” vote (and its aftermath), the shadow of Marine Le Pen in France and the general rise of populist movements across Europe, are taken as signs that support for traditional liberal democratic values is declining. Other data points seem to suggest a similar trend.

An ultimate fight seems ready to be staged between so-called “New nationalists” and liberal “internationalist” elites:

“Let’s call it the New Nationalism: a bitter populist rejection of the status quo that global elites have imposed on the international system since the Cold War ended, and which lower-income voters have decided—understandably—is unfair.” Politico

I share these fears, but there is another scenario that receives much less attention and which is equally disturbing. What if the biggest threat for democracy didn’t come from the populists and nationlists but from the opposite side?

Last weak I wrote a short story to show how that might happen. It was a deliberate exercise in fiction, very aware that anything of that kind is highly improbable.

Improbable, not impossible.

The threatened minority

In its essence, my short foray into fiction shows how the global minority of internationalists could tip over to the temptation of using its power (economic and technological) to stop the rise of nationalists and their policies.

Dystopian fiction consists in taking certain visible signs of the present to their extreme consequences. Like solving a labyrinth backwards, it shows the path to a specific end. Except that here we are not trying to get there.

Polarisation and weakening of national ties

We have rarely been so politically polarised. When this happened in the past, it didn’t turn out well. Polarised societies can stick together when a strong underlying sense of unity survives [2]. That sense of “oneness” is weakening today under the impact of technology and international mobility which makes the internationalist class less attached to national values than in the past. People in London, New York, Berlin, Barcelona and Copenhagen feel closer to each other than to their fellow countrymen in the periphery.

The more we look at the political debates, and at the discussions on social media, the more the opposite poles seem far apart. We might still speak the same language and cheer for the same team when national football is on TV, but we understand each other less and less and we show worrying signs of contempt toward each others.

Feeling of impotence

Within the context of a polarised nation state, internationalist are almost everywhere a minority. They feel now hostage of an angry mob that can use its electoral weigh to push reactionary policies. Manifestations in London after Brexit and in NY after Trump could just be the beginning.

Two more factors add to the feeling of impotence. Many internationalists are not citizens of the countries where they live and work, and therefore don’t enjoy any political representation (the real disenfranchised). In addition, there is a widespread feeling that facts and objectivity have lost importance. The vaccination debate is emblematic in this sense, socialmedia-reinforced beliefs are so strong that even the most obvious facts seem impossible to push through. Civilised argumentation feels increasingly futile.

Watch the clip below for a similar example.

[2]

Economic influence

While in the national political arena internationalists are increasingly marginalised and frustrated, their economic dominance has never been greater.

Nationalists have always found an easy target for their propaganda in the “global financial class”. In the past however, this group had relatively little influence in the economy. Fascism in particular was able to gather the bulk of the economic forces behind its banner, with the promise of industry-friendly protectionist and anti-union policies.

Today, national economies are much more dependent on global trade and finance. Cities, and the internationalists that inhabit them, have a disproportionate economic power, despite their political status of minority.

Technology

Even more important is the role played by technology, and technologists, the vast majority of which are within the internationalist ranks.

This is the defining element of this clash. A potentially marginalised minority (at political level) controls the ultimate levers of our society, across culture, media, retail and even military.

The recent fake news debate and the call on Facebook and Google to impose a sort of censorship on them shows how explosive this situation could become. Only recently, people in technology have been waking up to a situation where their job is not only neutral to some of the most problematic developments in society, but it’s likely causing them (or at least accelerating them). We have seen the first defections, on a personal level, and more might happen.

Exit vs voice

A way to look at how the situation might evolve is through the lenses of “Exit” and “Voice” [3]. A few observers, among which Balaji Srinivasan, believe in “exit” as the likely choice for internationalists.

Strengthening individual freedoms, facilitating international mobility and, in general, allowing people to “vote with their feet” is always a good thing. But the possibility of exit as a realistic scenario is questionable. Physical exit (actually moving) remains a difficult choice for many (assuming there is even a country that wants you). Technology exit (individual freedom through technology) is an interesting idea, but in the present state of affairs a bad government can still ruin your life regardless of the fact that you have the internet. Too much of your life is still offline. [4]

The issue with exit, in addition, is that it often leads to an even worse situation for those that stay behind. It is a legitimate choice, but a selfish one.[5]

The alternative to exit is voice, and with the electoral way potentially barred for a long time (remember, this is a pessimistic scenario) violent voice is not to be excluded a priori. Especially when we consider that only 19 of millennials in the US believe it would be illegitimate for the military to take over if the government is incompetent.

Comparisons

It is interesting, at this point, to turn briefly to history and compare the present situation with similar ones in the past. Can we find examples of progressive minorities abandoning democracy to protect their status? And if not, why?

The ascent of neo-nationalism is often compared with the early years of facism in Italy and nazism in Germany. Also then it all started with an anti-establishment protest, targeting a minority of cosmopolitan and internationalist “elites”. That minority, though, simply didn’t have sufficient economic and cultural leverage. Economic power was firmly connected to the land (and the people) and it didn’t take much to align national interests with business interests.

More recently, and on the opposite side of the ideological spectrum, populist movements in Venezuela and, partly, Bolivia have also failed to provoke a violent reaction from the democratic opposition (although a coup was attempted in Venezuela in 2002). While in this case economic power was clearly opposed to the ruling majority, the possibility of “exit “(mostly to the US) provided a real alternative to the use of “voice”.

Digging further, the only case where a democratically elected anti-elite movement was met with a violent un-democratic response is probably Chile in 1973. The difference here is that Allende never had the support of the majority of the population. On the other side, it is also difficult to argue that the social base behind Pinochet was democratic in the first place.

Anecdotes

This entire post (and the short story that inspired it) has been a rather theoretical exercise, exploring the possibility of a violent, undemocratic, reaction from the internationalist elite to the growing populist wave.

It is obvious that such a scenario is unlikely, as we have not even reached the point where a neo-nationalist victory can be ascertained. Even in its remote likelihood, it provides another good reason why we should do all we can to prevent slipping further down the black hole of a complete nationalist take over.

I’d like to conclude listing just a few tweets that kickstarted my fantasy and brought me to think of this. Nothing to worry about, it’s just a few isolated anecdotes…

[1]Post-war Italy is a good example where a country deeply split between communists and christian democrats managed to stick together. This was made possible by the presence of unifying elements: a fresh memory of the resistance to fascism which saw both groups fighting together (not without issues), a strong patriotic feeling, a full commitment within the party elites to the democratic constitution.

[2] My point is not to take position on the specific exchange in the clip. We could debate the misinformation of the 5 Trump voters but also the contempt that transpire from the anchor. Both reinforce my points above: these people have nothing in common and would gladly not have to live under the same roof/country. Yet they have to.

[3] Introduced by Alber Hirscham with his “Exit, Voice and Loyalty”. The basic concept is the following: when members of a group (e.g. a country) see their condition worsening, they have two options, “exit” (leaving, defecting) or “voice” (attempt to fix, oppose).

[4] In some cases the opposite is happening. People “exit” by leaving Facebook and/or Twitter.

[5] The typical examples is that of middle class parents withdrawing their children to public schools. This deprives that school of the constituency (middle class parents) which is often more vocal about the school’s problems and leave the remaining children in an even worse situation. Hirschman himself reached the point, obviously extreme, of regretting leaving Germany in the 1930’s.

2016

I remember 2016. Lots of famous people died that year. There was David Bowie, and then that other one, and Fidel Castro. Generations are a funny thing. People are born everyday and yet it seemed baby boomers were all dying at once.

They would have never believed how things were about to change. Democracy seemed such a stable feature of the western world. I guess that’s just what happens when you get used to things.

What do you say? Why didn’t we do anything about it? You really don’t have a clue, do you?

— -- 

I’ll have to go back to the nineties, before your were born. Progress seemed unstoppable. No more communism, no more nuclear risk, just trade, business and money. There were a few people who didn’t agree. Mostly old nostalgic leading a bunch of wannabe rebels with nothing better to do than trashing some windows in Seattle. Couldn’t they see that globalisation was for the poor?

Anyways, the combo dot-com 9/11 was the first big shake. The moment the rope we were all climbing with start cracking. We would only notice some years later.

The majority of us shrugged it off pretty fast. Times were good and loans were easy. Then 2008, another crash. This time the rope snapped, those behind were left back. No chance to catch up. No summit for them, not in this life.

What happened next is more complicated. I remember being in New York, how it all felt so great. I cursed myself for missing that train: “the best time to be alive”, someone said. It was a tale of two worlds. On one side unemployment, frustration, rage. On the other you couldn’t go to a fucking meetup without getting at lest three offers, two for jobs and one for an investment. “In case you start a company, you never know”. Euphoria and despair.

Then despair won. What do you expect when the majority of people feels neglected, derided, scared? What do you think they will vote? And yet again, we didn’t notice at first. Elections over we all turned back to our jobs, we had stuff to do, we were too busy to pay attention.

I guess London was the first spark. They had started deporting people, literally. Even if you were married to a local it didn’t matter. “No job, no stay” was their slogan, or some idiocy like that. The first big manifestation was huge. Londoners walking as one, protesting against a UK government they didn’t recognise. I swear to God somebody said there were even some Russians in the crowd, the fear of losing their townhouse stronger than allegiance to the political line back home.

It just didn’t matter. We were all upset, indignation was the big word, what a loser choice. Nothing mattered, not the headlines, not the strikes, not the protests from every single business unable to hire the talent they needed, or to retain the one they had. The economy kept spiralling down but they just didn’t care. They were accusing us of boycotting the national economy. Treason toward the fatherland. The economy security act won by a landslide at the referendum.

People in tech were the first to do something. Imagine going to work every day knowing that everything you do ends up against everything you believe in. Some started to quit already back in 2016. At first it was only a few, easily replaced. With fewer jobs around, finding an engineer that didn’t care wasn’t so difficult.

They called themselves “the resistance”. Weird things started happening. A few accounts disappeared. Puff, vanished, just like that. There were protests, people wanted to see some heads rolling. Nationalisation wasn’t a taboo word anymore. The big 5 went out publicly to confirm their pledge to neutrality. And yet the sabotages became more frequent.

The day the network went down will be remembered for long time. A new Bastille, some said. Except it was the opposite. Something did remind of France though, for a moment it seemed they would cut that boy’s head. The police came storming, two hundred were arrested, fifty went straight to death row. The toy was broken and there was nowhere to hide.

It is probably then that we started changing our mind. There was no hope in elections. They were just too many, just too angry. But we owned everything. We owned the banks, we owned the tech, the owned the culture. We owned the cities for Christ’s sake.

The army you say? Oh, come on.. They have always been where the power is. And what could they do anyway? Their drones, their intelligence, their satellites. It’s all software. We owned the whole goddam software and yet there we were, subjugated by our own government, a government we didn’t want, which didn’t understand us, which was trying to take it all away from us. Should we have let that happen?

If democracy was the price to pay, so be it.

It was a nasty business. Our great “liberation war”. I hate the name too. But a war nevertheless. You couldn’t believe the riots, the looting, the unimaginable violence. The curfew was established in December. Martial law on Boxing day. I don’t think the world had seen a bloodiest Christmas. Even during WWI they had stopped to play football. But we had no time for football. Revenge what was we had time for.

Why are looking at me like that. What do you want from me? What would you have done?

You should thank me. We did’t all for you.

Distilling a life

Newsworthy events are rarely just dots in the flowing of time. A life lasts for ninety years. A regime for almost sixty. It’s not even over yet. Can we distill it all in a sentence, a word, a thumb up or a thumb down? 

I think about it. At first it seems wrong, a forced synthesis that doesn’t allow nuances. Life, history in fact, is never that simple. 

And yet there is something liberating. Neutrality is a luxury only distant spectators can enjoy. In its simplicity, the medium takes us away from the comfort of our lives and throws us into the struggle. We are forced to take side. 

A carousel of images run through my mind. It has been a long life.  But the judgment is clear: thumb down. 

Notes from a wannabe tech ecosystem

Founders is a startup studio based in Copenhagen. We are proud of our origins and we really hope to participate in building a strong tech ecosystem in this town.

Copenhagen has captured a lot of media attention recently. It’s labelled as a true “up and coming” tech hub. There are plenty of conferences, plenty of talks, plenty of good hopes. And some good realities.

All this can have a positive spin. It can help an entire community suspend disbelief and take the risks required to actually build something real. It’s “fake it until you make it” applied to a city.

But there are issues we have to discuss, and some bad signs that if not stopped in time can ruin even the little good we have.

Here is my list of challenges, bright spots and two suggestions.

Challenges

Drought of tech talent

Copenhagen has too little tech talent. Not enough people chose that type of education in the past and most of them got lured by attractiveness of “safe jobs” in large corporation or IT consulting firms. The rest are fragmented in a multitude of startups, either too small to matter or just not going anywhere. There is an obvious problem with abundance of grants and generosity of seed and angel investors which are keeping too many small teams alive. A sign of maturity would be to cut losses on many of these teams and let the best people join the best companies.

This is not something we are immune from at Founders and we are working on fixing it.

Startup lifestyle vs. building large companies

Working on a startup is still more of a lifestyle choice than the desire to build a long lasting company. Too many founders are motivated more by the goal of avoiding corporate life (or having a boss all together) than by true ambition.

I have nothing against bootstrapping and being solo-entrepreneurs (especially if you can turn 40k in MRR with a product in autopilot while learning new skills and travel the world). But an agglomerate of micro teams and lone wolves working from co-working spaces won’t turn Copenhagen into a tech ecosystem in the same way it is not turning Bali into one.

Too much of the asshole gene pool is wasted in corporates

Great companies are created by people with the right amount of “asshole” gene. Characteristic of these individuals is an insatiable drive for success and since success and money are too easily equated, big business and finance have been for a generation the natural destinations of the asshole gene pool. We might not like it, but the booming tech scene in the US owns a lot to the flow of assholes-in-the-making opting for Silicon Valley instead of Wall Street and for Computer Science instead of an MBA.

In Copenhagen today there is still enough fat in the corporate ladder to attract most of the assholes. Many will find enough purpose in a nice house in the suburbs and will satisfy their competing edge with their ironmans and triathlons. Others will realise, maybe too late, that they made the wrong bet. This is already happening and it’s only growing. Just check the amount of business school, consulting, banking profiles going around looking for a technical co-founder.

No real tech industry

Beside a few startups breaking out from the pack there are some large IT consulting companies (admittedly doing quite well) and some old school software companies, mostly spin-offs from government IT services. This is not a tech industry.

The issue goes beyond the lack of tech talent. It involves marketing, hr, growth, customer support. More developed ecosystems like Berlin, London, Stockholm even - for not talking about NY and SF - have score of people working in tech, in one role of the other. This alone creates an entire awareness of where the future is. It forces people to consider the skills that are in high demand and creates an entire generation of potential founders or executives for new startups.

The lack of a tech industry is also the lack of modern middle size companies that are open and willing to innovate. This is particularly important for new startups that need early adopters for their products. B2B startups in Copenhagen are faced by the dilemma of serving the local enterprises with the entire burden of super-long sales cycles, layers of approval and fear of change, or go straight into to the UK or US “modern SMB market”. This puts us at real disadvantage compared to places where you first ten customer (or at least beta users) are all within a block from your office.

Too many suits

Large companies in the city are jumping en masse on the startup wagon. They have the illusion that innovation is something you can appoint an agency to do or you can achieve by sponsoring events, running incubators and maybe making some investments.

It is no coincidence that innovation in tech has always come from startups. There is something cultural about it that has nothing to do with ping pong tables, but with the way risks are taken, the way “waste” is allowed to spread and how (little) the entire process is managed. I haven’t see any of it in the many corporate “digitalisation” programs in town. And no, mobilpay is not enough proof of the contrary.

What you see instead is this:

Everything I am trying to convey in one sentence. Take off your jacket, loosen 2 buttons and you have a startup. With a single strike you insult the people that are working hard on your core business and you perpetuate all the wrong cliques about startups.

Too many politicians

Why when you think of Silicon Valley you never, ever, can think of a politician associated with it?

I believe there is a clear role for politics (for policy actually) to create the conditions for an ecosystems to prosper. The main rule: get out of the way. The second rule: work a lot in the background to remove obstacles. Make it easier to recruit from abroad, make it cheaper to live, rent, start, go bust. Finance universities and research programs (if you want) but don’t set any specific goal. Let waste and spillovers take the turn they like. Invest in serendipity.

There are too many politicians willing to claim their spot on the stage. Too many grand plans of becoming “the capital of xyz”. Lots of words, few facts.

Bright spots

Some foreigners will stay

Go to any tech company larger than 10 people and you will clearly see the pattern. >50% of them come from abroad. Copenhagen is an amazing place to stay and despite serious issues with living costs and lack of rentals (and the weather, maybe) it’s a place where most people would be happy to settle. If we avoid committing suicide by making it even harder to bring, and keep, people from outside, we stand a chance to at least attract the talent we lack. 

Universities reclaiming a space

At Founders we are guilty of not having been close enough with the local universities, in particular DTU. But even from a detached position it is easy to see that there is plenty of potential. The new wave in technology, particularly around the (often overhyped) fields of Machine Learning and AI, will require deeper skills than “simpler” web applications of the past. Technical universities in the city have the resources and structure to play an important role. I don’t believe that people attending Standford are necessarily much better, is what they get there, and the inspiration around them, that makes most of the difference. 

Some good companies are obviously being built

I won’t make names to avoid forgetting somebody but we all know which companies I am thinking about. Companies reaching that 50+ size where things start getting more stable, where you can train people properly, where it’s easier to enter if you come straight from school are the lifeblood of a real tech ecosystem. At Founders we are trying to play our part and although none of the companies we co-started are at that size yet, by pooling resources and building an infrastructure around them we are gradually reaching that scale. 

Suggestions

I’ll round off with 2 suggestions, knowing that there is a lot more to be done and a lot is being done as I write.

Recognise real successes, also beyond tech

Too often we make the mistake of considering tech the “elite” of the city entrepreneurial movement, even when the results are so-so. When I look at “real” businesses being built, however, retail is beating us big time. Tiger and Joe & The Juice are two examples successful businesses growing fast and rapidly expanding abroad. They might not have the “inevitability” or the glamour that tech has these days but they have something to teach all of us when it comes to winning. And that’s what matters. Let’s tell winner stories and let’s learn from them.

Make it easier to import talent

I cannot repeat myself enough. We need to import talent from abroad and we need to make it easier. Visa application, relocation, accommodation, schooling for children. All this can be done much better. Just think about the absurd CPR-address-bank account catch 22 situation every foreigner needs to go through (don’t know what I am talking about? just ask you foreign colleague). 

We can also make it cheaper. Living costs, and by reflex salaries, are very high. Building a successful company requires an initial process of testing and failing. And that initial phase needs to be as cheap as possible. The fact that the only real tax break on employees is restricted to “highly paid employees” is a clear sign that we put attention in “maintenance” of existing companies and not on the creation of new ones. 


You might say I am seeing the glass half-empty. Maybe. But the difference between a wannabe and a real tech ecosystem is also about stop pretending to be one.

When vision blinds traction

If such a thing as “the perfect recipe to build a large successful company” existed, it would probably read like this:

  • Start with great vision leading to large market
  • Identify opening or angle to attack it
  • Build initial version targeting your early adopters
  • Gain traction
  • Use traction to conquer your beach-head
  • Scale
(A man with a plan)

The truth is that very few cases like this actually exist (Elon’s secret master plan being one of them). The majority of mortals find themselves often in two different, but equally challenging, situations. Similar to a form of light induced blindness.

When vision blinds traction

The first one is “the entry point” challenge. In some cases the vision is clear, the opportunity is there to grab (often to the point of being “obvious”) but you just cannot find the right way to start.

The importance of finding the right entry point can hardly be overstated. From Geoffrey Moore’s “Enthusiasts and Visionaries” to Steve Blank’s “Earlyvangelist” to Peter Thiel’s “small niche” (to be dominated), everybody out there knows how critical it is to start with the right users.

But looking at it only from the point of view of a segment misses the point. It is rather the combination of: addressing the right users, with the right value proposition, delivered through the right set (preferably as small as possible) of features and the right channel. It’s what David Galbraith calls “ecosystem fit: the starting point for the path to capture the opportunity”.

What it boils down to is the ability to gain traction, beyond any doubt. Lots of things can be fixed when there is traction (from hiring to fundraising to differences of opinions in the team), but when you are struggling to make things work even the best relationships will start showing cracks.

In these situations, the presence of a clear vision and a large opportunity can paradoxically make things worse. Rob Go explained this with extreme clarity in one of the best post I have read on the topic (and podcast):

There is this risk that you feel (traction) is always around the corner, we just need to launch this product or this feature or get this level or critical mass.. and it’s always at the end of the horizon..

The presence of a large market will make it so that you can get a few customers by working really hard. And the clarity of the opportunity will give you the energy to endure. But in the end, these signals will mislead you by not pushing you hard enough to change more drastically and find the “real” entry point.

When traction blinds vision

There is then a second challenge, at the opposite extreme. Startups, or rather products, that have found traction or are just close to it but where it is hard to imagine what the next step would be.

Let’s say you have created a nice to-do app, you could certainly turn a profit around that (and even a good exit) but it takes serious strategy work to go from a product with traction to a business with huge revenue potential. Fred Wilson talked about this recently:

Most of the companies I work with didn’t really start out with a strategy. They started out with an idea that turned into a great product that found a fit with a market. And they jumped on that and used it to build a company. Most of them wake up at some point and realize that a single product in a single market is not a strategy and they need to come up with a plan to get a lot bigger and build a sustainable and defensible business.

When looking at these two challenges, many people would be inclined to pick the second one. It is definitely easier to figure out the next step when things are going well — the proverbial “luxury problem” — but there is also a counter argument. Having found your local maximum can turn into a trap, and lead the team into a blind alley with no clear path to the next stage. Lack of vision and clear strategy will result in endless discussions around what to do next, possible feature creep and ultimately throwing away the original traction.


Following the perfect recipe sounds great, but it’s rarely how life looks like. If you are facing one of these two challenges the best you can do is to acknowledge them and avoid letting your vision, or your traction, blind you.

Silence and neutrality

2016 will go down as the year where everybody woke up to the power of internet crowds. The year where the anti-hierarchical nature of the web manifested all its influence on the political discourse. “Gradually, then suddenly”.

This story has been covered a lot and well. Another aspect has received less attention. Together with the rise of the crowds we witness the demise of the silent majority.

Silent majority and the illusion of consensus

Since Nixon made the expression popular in 1969, the idea of a silent majority has been often used in antithesis to nosier positions and groups. From pacifist movements to labour unrest to football hooligans. For every group resorting to noise to manifest its dissent, there is a moderate majority which needs to be protected.

But what does this majority stand for? Silence is not neutral as it might be assumed. Silence is communication just like “no ideology” is an ideology of its own. The concept of a silent majority presumes the existence of a tacit consensus, one that doesn’t require to be expressed noisily but somehow exists objectively.

Many in the past 20 years have promoted the existence of an objective consensus. The end of the cold war was meant to unleash a post-ideological (or post-political) era. An era of technocratic governments following fundamental laws and the rule of the obvious. Political debates moved from the material to the personal, economics (the most “scientific” of social sciences) took over the scene.

Yet this assumption of consensus, this illusion really, contains the seeds of its own destruction. Blinded by the pretence of objectivity, the bearer of consensus becomes subject to the worst form of ideology. Not only does he claim not to have one, he also scorns anyones who does. Over time, this superiority becomes laziness. The ranks of the “objective truth” start shrinking, those that still benefit from it turn into defence mode while the rest fall easily into the arms of the emerging crowds. It shouldn’t surprise that is it now Trump’s turn to waive the flag of the silent majority.

There is probably no better, and tragic, example of this trajectory than the EU. The European project started as an idealistic attempt, smart enough to understand the need for a pragmatic anchor. Just like a startup that requires both an ambitious vision and a tangible beachhead to achieve traction, the EU found its own in economic integration, initially within the coal and steal niche. Over time, the beachhead expanded. The economic rationale became the main motor of integration, “obvious” enough that it didn’t even need to be justified. The how and the what took over from the why. The consensus was clear, until it wasn’t anymore.

Moderates and radicals

The illusion of consensus goes hand in hand with the mirage of moderation. The belief that there is always a neutral space in between opposed factions. It’s a comforting feeling: “I want order but I am not a racist”, “I like equality but I am not a socialist”. It’s the temptation of simple solutions, defined negatively as a watered down version of extreme positions.

Unfortunately, moderation leads often to the same results as the illusion of consensus. Because moderates don’t really stand for anything they end up retrenching into an assumed sense of superiority, justified by some sort of objectivity in their position. It’s the “intellectual yet idiot” targeted recently by Nassim Taleb.

A good example can be found in this discussion of “pragmatic vs radical centrism”. Pragmatic choices are directly linked to the crony capitalisms resulting from the lack of true disagreement between alternative visions of the common. When a pragmatic centre-right and a pragmatic centre-left join forces in a grand coalition, “the range of policy options is narrowed down to a pragmatic compromise that maximises the rent that can be extracted by special interests.“

Radicalism is the opposite of moderation. It’s a positively defined position. Radicals stand for something.

Adopting a radical position doesn’t mean playing at the extremes (you can easily be, as seen above, a radical centrist), and it doesn’t mean accepting rules of engagement based on harassment and provocation. It means rejecting the illusion of consensus and the false comfort of moderation. It means taking up the challenge of active political participation, well aware that in 2016 it doesn’t require joining a political party or even voting for one.

Compromises and coexistence

Does this means giving up to tribalism? To a state of permanent conflict, a social media powered cacophony of noisy crowds?

That’s certainly not a desired state, but it is more a question of how we design the arena of our disagreements, rather than suppressing them. In the past, the parliament was the primary place of debate, negotiation, compromise and coexistence. That place is today both limited and outdated. Our new public spaces are larger and more inclusive. But they are also driven by dynamics that foster closure at the expense of openness (the filter bubbles), short outburst of anger over longer, more considerate, reflections. Beyond that, we need a culture of dialogue which simply acknowledges our disagreements while realising that coexistence is really our only option.

2016 has proven that there is really no escape from the bottom-up explosion of the crowds. The “insurgents”, as Naval calls them in the tweet above, cannot be stopped with money and media control. Those that disagree with them need to embrace the new reality. Forget silence, forget neutrality. Welcome to politics.

Bad ideas

A known fact about startups is that most of the really successful ones looked like bad ideas at the beginning. This statement shouldn’t surprise and it is indeed a truism if we agree with another common knowledge in investing: to achieve superior returns you need to be right where everybody else thinks you are wrong.

The acceptance of this fact has generated a funny phenomenon, driven by an evident logical fallacy. If most great ideas looked like very bad ideas then every very bad idea could hide a great one.

It is obviously the investor’s job (and even before that, the founder’s) to distinguish “real” bad ideas from good ideas that just look like bad ideas. But it is not an easy feat. In doubt, most people tend to shy away from calling out a “real” bad idea when they see it. The internet has a long memory, and you don’t want to look like these guys .

There is a sort of collective hallucination. Founders are pushed to come up with the craziest idea possible, anything short the Elon would make you “unambitious”, observers that in lack of courage calls them “bold”, lots of puzzled faces looking hesitantly at each others. A modern version of The Emperor’s New Clothes.

Who will play the child?

Longing for good jobs: the deliveroo strike and the future of work


Photo by Russell Davies on Flickr

In this post, I start from the recent strike performed by riders of the UK delivery startup Deliveroo to look at alternative scenarios concerning the creation of “good jobs”. I claim that “good jobs” are not about the relationship between jobs and technology but rather a product of the total value created by it. Attempts to enforce the creation of good jobs through redistribution are bound to fail in the absence of sufficient value to be shared. On the other hand, protecting “poor jobs” by out-of-market subsidies like tax credits and basic income will result in a lose-lose situation where neither innovation nor fairness are achieved. Understanding the unintended consequences of alternative actions should lead us to a different approach: less interventionist and more evolutionary.

What is a good job? And, how can we protect the one we have while creating more of them?

The recent successful strike conducted by riders of the UK delivery startup Deliveroo offers a good chance to look at these questions in a practical case, outside generic and buzzword-laden discussions about the future of work.

Machine jobs, human jobs and “good” jobs

A typical mistake we make when talking about the future of work is to think of jobs created by new technology as involving, by default, sophisticated skills, new knowledge, or both. In short, an advancement on what we used to do before. While this is true for some people, it is not a general rule.

A more realistic approach is to look at jobs that humans can do because we are better at them than machines, where better doesn’t stand for “more intelligent”, but rather “diversely intelligent”. Historically, technology has relentlessly taken over tasks that were a good fit for it, humans have kept everything else (which, to be fair, includes a whole amount of new jobs being created). A cynical way of putting it would be to say that humans occupy the space left over by the machines [1].

The gig economy, and in particular food delivery, is no different in this sense. It is a product of information technology. On the buyer side, twenty years of e-commerce and now almost ten of smartphones have created the very basis for the on-demand movement, liberating latent desires to get everything we want, when we want it. On the the supply side, the same tech allows people to find work (and to be found by it) anywhere, anytime. All glued together by beautifully designed digital platforms. Discovery, recommending, searching, matching: all machine tasks. Delivering, especially if done by bike in a busy city: human task [2].

Seen in this light, there is nothing intrinsically bad about gig economy jobs. They are an updated manifestation of a machine-enabled division of labour started in the industrial age [3]. Pushing the argument a bit further, the emergence of the gig economy demonstrates what technology optimists keep saying: new tech creates new jobs, possibly more than those it deletes.

What makes then people so worried, and workers so upset? What makes these jobs worse, in the public eye, than “good old” industrial economy manufacturing (or clerical) jobs? Or, looking from the other side, what made these better? They didn’t need special skills, they didn’t need high education, and they could count on plenty of supply. The answer, as a survey of recent researches performed by the magazine fivethirtyeight shows, might come as a surprise:

“…this much is clear: For all of the glow that surrounds manufacturing jobs in political rhetoric, there is nothing inherently special about them. Some pay well; others don’t. They are not immune from the forces that have led to slow wage growth in other sectors of the economy. When politicians pledge to protect manufacturing jobs, they really mean a certain kind of job: well-paid, long-lasting, with opportunities for advancement. Those aren’t qualities associated with working on a factory floor; they’re qualities associated with being a member of a union.”

Which takes us back from where we started: the Deliveroo strike.

Bringing unions back to the gig economy

DonkeyHotey on Flickr

It would seem, therefore, that what gig economy jobs have lacked so far in order to improve their status is collective bargaining power. The same that led to the painfully achieved social contract of the post war years and turned industrial jobs into “good jobs” even when, as it proved later, this was a distortion of free market dynamics. I will get back to this point shortly.

To confirm this impression, it is sufficient to look at the reactions the Deliveroo strike generated among sympathetic observers. Like the New Economic Foundation (NEF), a “think tank promoting social, economic and environmental justice”, which in a recent comment to the events wrote:

“Insecure, badly paid work is bad news for the economy overall. A weak voice for employees’ rights leads to a lopsided share of national income going to company profits and sitting in banks, rather than into wages and spending in the real economy.”

“The divide and conquer approach of splitting up this workforce into thousands of ‘self-employed’ contractors, managed via an app, may seem appealingly efficient to an employer. But the power imbalance created is counterproductive if we look at the bigger economic picture.”

“This victory, however small, is symbolically very significant. The strike is an example of collective bargaining navigating a new frontier of app-enabled work — and the new power imbalances that come with it.”

According to the people at NEF, we are facing essentially a question of redistribution, where “collective bargaining” will prove key to navigate the “power imbalances” that come with “app-enabled work”.

What these commentaries miss is the reason, along with the possibilities created by technology, why gig economy jobs exist in the first place. They have not only suffered from power imbalances, they own their very existence to these imbalances. To put it more clearly: these jobs have emerged in the last years thanks to a regulatory loophole (the independent worker vs employee status) which has allowed the achievement of a lower-than-normally-permitted equilibrium between demand and supply (a “clearing price” if we want). But while this low clearing price has provided the fuel to kick start innovation in the on-demand segment, its days may be numbered. At least in the view of union leader Mags Dewhurst:

“..this kind of tech has been designed to isolate individuals and atomise work, deskilling the industry and driving down wages…”

“…the difficulty we faced had been accessing them. How do you reach thousands of people when they are spread around London? I was literally chasing them down the street if I saw a blue jacket.”

but…

“The biggest problem people face is getting in contact with each other. Once they are in contact and they have decided to work with one voice, they have effectively unionised and the company is screwed.”

“This [the Deliveroo strike] is just a taste of what could happen when low-paid workers campaign together”

The recent strike may well put an end to the low clearing price of the gig economy (at least part of it). But is the overall economics of the model sufficient now to redistribute the pie? Or..

Can gig economy jobs be “good jobs”?

The answer to this question is likely to be negative. Looking at why this is the case can help us understand some of the characteristics that make a good job sustainable.

Let’s start by looking at the redistribution-through-unionisation option.

Gig economy jobs (delivery in particular) carrie an intrinsic weakness that practically makes it impossible for them to become good jobs just based on a redistribution of power between the parties. The short version is that they create too little additional value between the restaurant and the customer for both the platform and the worker to benefit from it [4]. Ultimately, delivery companies simply cannot afford to offer better conditions to their riders.

Workers are faced therefore by a real “squeeze”. In the short term, the acceptance of their requests (and thereby the removal of the low clearing price) has good chances to put their employers out of business. In the long term, increasing the cost of delivery might create a sufficient incentive to push for automation [5]. No matter how we see it, a better bargaining power from the workers side will likely destroy the long term prospect of delivery jobs to become sustainable [6].

An alternative option is what liberal thinkers in my twitter feed have been advocating: redistribution after market equilibrium.

This position is clear. Improved bargaining power (which is what will achieve minimum wage for Deliveroo riders) might be good in the short term, but it has an overall negative effect for the economy as it stiffens innovation and limits employment opportunities [7]. This is basically an argument to maintain the low clearing price mentioned above, without putting the burden entirely on the workers’ shoulders. The alternative is for someone else to take fill the gap, and that someone is the “public”. An example of this redistribution outside of labor market equilibrium is tax credits, advocated in the US by prominent business leaders like Warren Buffet as a measure to be preferred over the distorting effects of minimum wages.

But it is not so simple. On one hand, maintaining an artificially low cost of labour puts a (publicly subsidised) break on innovation, as the incentive for these companies to automate will be lower. On the other, it risks satisfying only partially the request of the riders, in particular their intangible, but equally important, sense of fairness. Their economic needs might be taken care of, but they will probably still feel “exploited” as competition for work coupled with a strong system of tax incentives pushes the salary per hour towards zero. Profit will be accumulated at the corporate level (in few hands) while society will foot the bill [8].

To recap:

Unionisation satisfies better our sense of fairness but ultimately has low chances of achieving the objective of turning bad jobs into sustainably good ones. Outside-of-market corrections seem to have a better chance of saving the jobs (assuming this is really what we want) but to do so require a privatisation of benefit and a socialisation of costs (both in terms of innovation and financially).

An interesting dilemma:

Fair but bad for jobs vs. Good for jobs but unfair

Other possibilities

Basic income:

A discussion about the future of work would not be complete these days without talking about basic income. Leaving for another time the different nuances of the concept, in this specific instance I see its effects in many ways similar to those of tax credits. The main difference between the two is that tax credits require the beneficiary to have a job, basic income doesn’t. This will likely generate less competition for delivery jobs and less downward pressure on wages, but I don’t expect basic come to simply make supply disappear (and therefore push for more automation). People on basic income will keep looking for jobs driven by the desire to increase their disposable income (even in the most ambitious proposals still quite low by general standards) while having less incentive to “fight” for a minimum wage compared to a situation without neither basic income nor a system of tax credits.

Modern cooperatives:

Another option is to maintain the low clearing price by eliminating platform profits. Riders owned cooperative could keep the price of delivery low enough to be acceptable for customers but high enough to be sustainable for riders. Automation would be the only real long term challenge, as companies that want to reintroduce profits into the picture would do it by substituting the cooperatives with robots as soon as that option becomes economically sustainable.

Voluntary pay:

A true market change would come if customers themselves shift their willingness to pay for human deliveries. This would immediately increase the size of the pie and, depending on how much more they would like to pay, make room for a redistributive scenario. The consumer dilemma between “cheaper” and “more sustainable” is well known (watch “The High Cost on Low Price”, documentary about Walmart) and a change of heartdoesn’t seem to be anywhere near. On the other hand, the organic food movement proves that for some principles people are ready to pay more, but this requires an entire discussion on its own which I leave for another time.

What have we learned?

Time to draw some conclusions.

Good jobs require stronger fundamentals. This might be obvious but it is worth repeating.

  • Wealth creation comes from true innovation (technological or in business models) where additional value is released in the economy. If innovation limits itself to the exploitation of a temporary arbitrage it wont survive the inevitable pressure for redistribution that is bound to emerge no matter what.
  • Focusing on the machine vs. human dichotomy is good for headlines but it distracts us from identifying tasks where humans have a sustainable role to play. This is more dependant on economic factors than pure technical feasibility of a given automation.

There is really no easy way out. No amount of external intervention, being it pre- or post-market equilibrium can guarantee the creation, and maintenance, of good jobs.

  • Going back to old protections have a normal element of fairness (and I am myself tempted to wish for it when i read the stories in the newspaper) but is no long term solution.
  • Deep market corrections (although more innovative and pro-market like tax credits and even basic income) have nonetheless a distorting effort. Paradoxically, they will postpone innovation and keep human in low skills job (for those that think this is a problem).

What do I think about all this?

I started writing this post as a way to understand what was going on and to look tangibly at different scenarios and their implications. As it often happens, the more you try to genuinely understand a topic the more you realise that there is no simple answer. That would be too easy. But since it is wrong to just sit and comment without proposing something I’ll indicate my preferred choice.

Faced by competing choices with no apparent (at least not to me) solution that achieves both innovation, job stability and fairness, I consider non-intervention to be preferred. So, no intervention to settle the dispute by imposing a min wage, and no helping hand (at least not explicit) to the company by appeasing workers through other public transfers.

This position is not motivated by a blind acceptance of the “invisible-hand” but rather by the acknowledgment that each choice opens up for a range of “unintended consequences” that risk overshadowing even the best original intentions. In situation of high uncertainty, policymaking should refrain from the temptation to impose a specific solution and adopt instead a “stewardship” approach as advocated by Eric Beinhocker and the “complexity economics” school

“…rather than engineering specific outcomes, government’s role as system stewards is to create the conditions in which interacting agents in the system will adapt towards socially desirable outcomes”

In our case, this means levelling the playing field between riders and platforms, removing information advantages (for example with better access and export right for riders’ data) and allowing therefore a more natural rebalancing of power, also through collective action.

In a way, my suggestion is about embracing the historical process by which a job first starts outside of the controlled labour market, then gets rebalanced , and if it is not able to survive, disappears or gets automated. It is not the end of the world, it’s evolution.


[1] I subscribe in full here to Venkatesh Rao’s definition of machine work as “algorithmically-scalable work” and human-work as “work that is not worth automating. This is a combination of work being hard to automate and low returns to the automation due to limited algorithmic scaling potential (a good example is tax software for parts of the tax code that change very frequently).” http://www.ribbonfarm.com/2013/07/10/you-are-not-an-artisan/

[2] Yes, I am perfectly aware that self-driving cars are coming and that people are working on projects like https://www.starship.xyz/ . Even so, delivering small parcels and food in highly dense urban areas (including walking up staircases at times) is a costly endeavour for machines and not a place to look for high “algorithmic scaling potential” (see above)

[3] Gig economy jobs receive a lot of criticisms for being “bad jobs”. For the purpose of this discussion I have decided to leave out the “servitude” argument, criticising these jobs for not exploiting the full “human” potential and for being the manifestation of a widespread inequality in society (rich of money poor of time on one side, rich of time poor of money on the other).

“The Servitude Bubble is condemning people who might be doing amazing, wondrous, and miraculous things to be butlers, maids, dog-walkers, net-servants — or, perhaps worse, code-monkey enforcers who, chasing their own little payday, make people into net-servants.”

https://medium.com/bad-words/the-servitude-bubble-c9e998c437c6#.krbite12a

[4] Here, a distinction between Uber and the majority of other gig jobs needs to be made. Uber innovates more deeply into the structure of its industry. By streamlining operations (eliminating a large part of the overhead in traditional taxi dispatching business) and by liberating latent demand for a business with low variable costs, it allows, in principle, enough room for both platform and drivers to benefit. Food delivery, on the other hand, operates in a business where variable costs (food) are high and where it is much more difficult to find optimisation elsewhere. With little operational efficiencies to be achieved on the production side (the restaurant) and a ceiling on the price side imposed by the consumers’ willingness to pay and constant fear of new investor-subsidised entrants, there is simply not enough room for both. An extensive coverage of this point can be found here.

[5] Even where a certain job is not obviously a “machine job”, sufficient economic incentive might change the picture.

[6] This is also easily demonstrated by the fact that these jobs don’t exist in settings where the clearing price was simply not allowed to go lower enough .

[7] Low clearing price jobs (and people that take them) prove that there is latent demand for jobs even below what people normally think is fair.

“However, the fact that online platforms can attract workers in large numbers despite relatively unappealing conditions is an indictment of the labour market in many of the countries where they operate. In France, many Uber drivers come from the deprived banlieues and say that discrimination prevents them finding mainstream employment. In the US, a study by JPMorgan found that people used online platforms mainly to help them weather a dip in their regular earnings — as an alternative to cutting spending or running up debts.”

https://www.ft.com/content/30d06228–20da–11e6–9d4d-c11776a5124d

[8] Somebody still believes in “trickle down effects” and in the possibility to effectively tax corporate profits. I don’t.